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2008-02-01 MinutesBOARD OF SUPERVISORS MINUTES February 1, 2008 •i •i •i Supervisors in Attendance: Mr. Arthur S. Warren, Chairman Mr. Daniel A. Gecker, Vice Chrm Ms. Dorothy Jaeckle Mr. James "Jim" Holland Ms. Marleen K. Durfee Mr. James J. L. Stegmaier County Administrator Staff in Attendance: Ms. Karen Aylward, Development Manager, Economic Development Ms. Janice Blakley, Clerk to the Board Mr. Kevin Bruny, Dean, Chesterfield University Mr. Allan Carmody, Dir., Budget and Management Ms. Marilyn Cole, Asst. County Administrator Ms. Mary Ann Curtin, Dir., Intergovtl. Relations Mr. Jonathan Davis, Dir., Real Estate Assessments Ms. Rebecca Dickson, Dep. County Administrator, Human Services Mr. William Dupler, Dir., Building Inspection Colonel Thierry Dupuis, Police Department Mr. Robert Eanes, Asst. to the County Administrator Mr. Donald Kappel, Dir., Public Affairs Mr. Rob Key, Director, General Services Chief Paul Mauger, Fire Department Mr. Richard M. McElfish, Dir., Env. Engineering Mr. Jeffrey Mincks, Dep. County Attorney Mr. M. D. Stith, Jr., Deputy County Admin., Mr. Kirk Turner, Dir., Planning Mr. Warren called the special meeting of the Board of Supervisors to order at 3:07 p.m. (It is noted that all five Board members signed a "Notice of the Meeting" waiving any further notice.) 1. LEGISLATIVE UPDATE Ms. Curtin first informed the Board that, with one week remaining before crossover, a lot of legislation could die or change considerably over the course of the next week. She then provided an overview of issues related to proposed 08-79 02/01/08 legislation that could. affect the county's financial strength. She stated both the House and Senate budgets will be released February 17th and noted that, when the Secretary of Finance briefed the money committees regarding December revenue, the numbers were not encouraging, and- the state could be looking at a $1 billion shortfall. for the upcoming biennial budget. She provided details of legislation related to the Homestead Exemption and stated there is proposed legislation in the House that would-roll back and eventually repeal the machinery and tools tax. She noted that there are a number of bills that would change the county's processes for setting the local tax rate and adopting the budget. She reviewed legislative issues related to transportation and growth, including legislation ,that would change the timeframe for reviewing commercial development; two regional transportation authority bills; legislation relative to representation on the Richmond Metropolitan Authority Board; and a land use study resolution that has been broadened to look at land use issues at the local level. She provided details of Senator Watkins' proposed impact fee bill, which was heard in the Senate Local Government Committee earlier this week. She stated the bill eliminates all existing cash proffer authority; curtails the Board's ability to accept any offsite dedications; and limits any impact fee to be used only for schools, roads and public safety facilities, taking parks and libraries out of the equation. She further stated the bill caps the impact fees for this area at $5,000 per lot, and noted that the county's current cost calculations show the per lot cost at a much higher level. She stated, in its current form, the bill requires localities to go through a very complicated process, with calculations that could lead to conflict with developers. She further stated, if the legislation is approved, the county would have less flexibility to deal with the impacts of development and infrastructure needs and might shift costs to county taxpayers. She asked Mr. Carmody to come forward and address fiscal implications of the legislation. Mr. Carmody stated staff's calculated gross cost of capital facilities is $31,692 and noted that $15,600 of this amount is funded by cash proffers and the remainder is paid in local taxes generated by households. He further stated the average cash proffer being collected today is $7,700 per unit, increasing the local revenue share. Discussion ensued relative to the cash proffers currently being collected-for projects that were approved several years ago. Mr. Carmody reviewed zoning trends for calendar years 2005 through 2007. He stated 5,446 units proffered improvements less than the maximum, with nearly 30 percent of them offering something other than the maximum cash proffer in the way of reduced proffers, offsite improvements and land dedications. He referenced the recently approved Branner Station development, which proffered road improvements valued at nearly $120 million. He stated the current cash proffer allows that flexibility, but under the proposed legislation the county would lose that flexibility and opportunity to look at site-specific circumstances. He provided a 2007 revenue comparison for cash proffers versus impact fees under the proposed legislation. C7 L 08-80 02/01/08 Mr. Warren stated it is clear that the impact fee legislation would not provide for the needs that exist at the county's current cash proffer level. •i u •I Mr. Holland concurred with Mr. Warren and expressed concerns about the legislation going forward. In response to Ms. Durfee's question, Mr. Carmody stated the proposed legislation would eliminate cash proffer authority for new zoning cases coming before the Board and provide for impact fee authority for roads, schools and public safety facilities only. He further stated the Board still has the ability to consider imposing impact fees through 2007 enabling legislation, pending enactment of the proposed legislation. In response to Mr. Warren's question, Mr. Mincks stated the proposed legislation would trump the county's current ability to impose impact fees. Mr. Warren inquired where Senate Bill 768 currently is in the legislative process. Ms. Curtin stated the bill was referred from Senate local Government Committee to the Senate Finance Committee, and the Finance Committee is scheduled to review the financial portion of the proposed legislation on February 6tn Mr. Mincks noted that the original bill included a grantors tax revenue item attached to it that is not in the substitute bill, which would be collected during the buying/selling process. Ms. Durfee inquired why the legislation was sent to the Finance Committee since the grantor's tax item has been removed. Ms. Curtin stated it is a successful attempt to legislation when it is r She further stated the loss of revenue at infrastructure. unknown whether or not there will be put the grantor's tax back into the Beard in the Senate Finance Committee. committee could also hear about the the local level to deal with Mr. Gecker stated he would like to hear from the public. Mr. Warren inquired whether anyone in the audience would like to comment on the proposed legislation. No one came forward to address the issue. Mr. Warren stated the proposed legislation would have a tremendous impact on the way the county has been doing business. He further stated the cash proffer system has worked fairly well since the early 1990's, indicating that it is a flexible system. Discussion ensued relative to any offsite improvements that would be allowed under the currently proposed legislation. Mr. Gecker expressed concerns that a zoning case like Branner Station or the Roseland proposal could not be approved because there is no alternative mechanism sufficient to fund 08-81 02/01/08 the improvements that would be necessitated by a development of that size. He stated the county would be required to promote small-scale developments versus larger scale developments if the legislation were enacted, and would not be able to target improvements where they are needed, but instead have to wait for an uncertain funding source to hopefully catch up on the improvement base. He further stated the Branner Station case was attractive because of its ability to phase the transportation improvements coincident with residential development. He expressed concerns that the county would always be playing catch up if the legislation were adopted and inquired how the Board could responsibly approve any significant residential development without sufficient infrastructure to handle it and no clear funding source for the infrastructure. Mr. Holland stated he is particularly concerned not only with the financial impact of the legislation, but also the lack of flexibility that the Board would have. Ms. Durfee expressed concerns that the legislation would not provide for libraries, parks or the possibility of future categories, such as open space. She inquired whether a fiscal impact analysis has been performed on these other categories. Ms. Curtin stated she intends to present both of those issues to the Finance Committee. In response to Mr. Warren's questions, Ms. Curtin stated VACo is opposing the legislation and would like to see it carried over. Discussion ensued relative to otherlocal; governments that have expressed opposition to the legislation. Mr. Gecker expressed concerns relative to the suggestion that has been made indicating that Chesterfield would have been significantly better off if this legislation had been in place based upon the years when the cash proffer was lower than it is today. He stated he would like to publicly disabuse the notion that Chesterfield would be better off with this legislation, indicating that he believes the legislation would create a significant loss of revenue, as well as make future development in the county much more difficult. Mr. Warren recognized Senator Watkins, who had recently arrived at the meeting. Senator Watkins came forward and stated the proposed legislation is a result of continuing pressure from the county and other jurisdictions to find another system that would work better with regard to payment of infrastructure needed across the Commonwealth. He stated the legislation is not final until it has gone through the entire process and is ultimately signed by the governor, indicating until that point is reached, it is unknown what the law will or will not do. He stated he brought legislation forward that would change the county's system from cash proffers to impact fees, as requested by the previous Board of Supervisors. • C I~ 08-82 02/01/08 Mr. Warren stated the previous Board saw impact fees as a way to address the impact of developments approved prior to the cash proffer system, but the proposed legislation is completely different from what the previous Board had requested. • • Senator Watkins stated the proposed legislation would impose impact fees on developments that that county cannot collect cash proffers from. He expressed concerns that he has attempted to carry forward this legislation many times and has finally found a way to gain the support of the homebuilding industry, and now the jurisdictions do not support it. He stated jurisdictions cannot continue using a cash proffer system, which he considers "legalized extortion" as a means of paying for infrastructure needs of growing counties, noting that more adversely impacted will be the jurisdictions who have yet to see the growth that Chesterfield has seen. He expressed concerns relative to the exorbitant cash proffers being collected by jurisdictions to the north. He stated every time the county increases its cash proffer, the assessed value of every home is impacted and taxes on residents are increased. He further stated, in his opinion, the legislation is headed in the right direction and it is premature for the county to say that it is wrong. He requested that the Board show him details and point out areas that need to be changed. Ms. Jaeckle thanked Senator Watkins for addressing the Board. She expressed concerns relative to the bill's lack of flexibility to address infrastructure needs. She stated developers seemed to like providing offsite improvements that would benefit their developments, rather than cash proffers. She further stated the legislation would take the Board's ability to accept offsite improvements away. Senator Watkins stated the legislation would still allow for onsite park and school sites, as well as offsite development of transportation infrastructure directly associated with the project that is not in the Six-Year Plan, covered under either an impact fee or prior existing cash proffer. Mr. Stegmaier stated the Board would not be able to accept the type of offsite road improvements provided with the Branner Station development under the legislation. Senator Watkins stated the county could establish any number of impact fee zones. Mr. Gecker expressed a concern that, under Senator Watkins' proposal, infrastructure would always be in arrears, instead of in advance of development. He stated the county is looking to develop larger tracts, rather than smaller, with flexibility to provide for the infrastructure impact in advance because of the size of the development. Senator Watkins inquired whether the Board would rather have cash proffers than impact fees. Mr. Gecker stated he would prefer that the prohibition against accepting offsite improvements be removed from the legislation to allow infrastructure to be built in advance. 08-83 02/01/08 After an additional inquiry from Senator Watkins relative to credits against future impact fees, Mr. Gecker stated he was not prepared to negotiate the legislation at this time, but would be willing to sit down and discuss the parameters of what would make the legislation acceptable. Mr. Holland stated the lack of flexibility is a major concern for him. There. was discussion relative to the grantors' tax provision that is not currently included in the legislation. In response to Senator Watkins' statement about increases in the value of homes due to cash proffers, Ms. Jaeckle stated certain areas become popular places in which to live, and she does not know whether removing the cash proffer would make homes in these areas more affordable. Ms. Durfee stated the bill is troubling to her because of its fiscal impact and lack of flexibility. She inquired why the impact of development on parks and libraries is not included. She stated she is not confident that the Finance Committee will provide the needed attention to the proposed legislation. She further stated she understands Senator Watkins' passion for his legislation, but requested that he also consider the passion behind localities' needs for public facilities and services. Senator Watkins stated he and Ms. Durfee have spent a lot of time together on this issue, and the single answer that they always came back to was coming up with an impact fee that worked. He further stated he is not trying to convince the Board that everything is perfect with the bill, but it is a step in the right direction. He stated it is a huge undertaking to change something that has been embedded for 30 years. He further stated .the latest version of the legislation includes an effective date for the ability to use impact fees of July. 1, 2008, and does not phase out cash proffers until another 12 months. He stated he: does not recall a single time in his 27 years of representing Chesterfield County, that anyone in the county has ever come to him and asked him to submit a change that he has not done so. He requested that, if the Board finds something that needs to be changed and can show him empirically where that change .benefits t_he citizens of Chesterfield, he will submit it. Mr. Warren stated the answer is to put off the bill until next year to provide time for_ discussions regarding the issues surrounding the legislation. He thanked Senator Watkins for coming today to discuss the bill. Senator Watkins stated the bill is still changing and will continue to change as long as the General Assembly is still in session, noting that nuances are being requested by representatives from counties and cities, as well as developers. Mr. Warren recognized Dr. William Brown and Mr. Reuben Waller, Planning Commissioners who were present at the meeting. i• i• i• 08-84 02/01/08 Dr. Brown came forward and shared the Board's concern, as a Planning Commissioner, with the lack of flexibility in the proposed legislation as it currently exists. He also expressed concerns, as a citizen, regarding the financial impact of the legislation, indicating that it would take approximately a 50-cent increase in the real estate tax rate to generate the same revenue with impact fees as cash proffers are currently generating. • • •i Mr. Waller stated the proposed bill needs additional work, indicating that if it were studied and refined during a study period and brought back at the next General Assembly session, perhaps a compromise could be reached between the existing cash proffers and proposed impact fees. Mr. Warren then recognized Mr. David Wyman, Dale District School Board representative. Mr. Wyman stated he understands that schools will not be paid for solely with cash proffers, but it is important that there be as many options and as much flexibility as possible for the funding of schools. He expressed concerns about not being informed of this legislation until the past 24 to 48 hours. Mr. Warren inquired how the county would be able to finance school and transportation needs if the impact fee legislation were approved with a cap of $5,000. Mr. Carmody stated 80 percent of the county's $15,600 cash proffer goes to roads and schools. He further stated, in looking at a $150 million gap between revenue generated by cash proffers and impact fees under the current legislation, there would be approximately a $120 million shortfall for schools and roads. Discussion ensued relative to increasing the real estate tax rate to make up for the revenue shortfall. Mr. Stegmaier stated Dr. Brown is correct that an additional tax rate increase of 50 cents would be necessary if the revenue shortfall had to be made up in one year. He further stated the information that has been presented to the Board relate to zoning cases approved in 2007, so fortunately the revenue could be made up over a period of years as those lots develop. Ms. Durfee stated this is a complex bill and noted that cash proffers have been in place for 30 years. She expressed concerns that homebuilders have been opposing impact fees for so many years, but now support this legislation. She stressed the fact that very few of the 95 counties in Virginia have increased their cash proffers to $47,000. She stated Chesterfield is nowhere near the $47,000 figure and has not increased proffers every year. She noted that the county has historically approved a cash proffer maximum below the calculated amount. She expressed concerns that the fiscal impact on all the different impacted areas of the county has not even been looked at, indicating that libraries, parks and fire and EMS have been left out of the proposed legislation. She stated the legislation would hinder the Board from being able to reduce the real estate tax rate. She encouraged the development community to 08-85 02/01/08 understand the county's fiscal needs for its public facilities. Mr. Warren made a motion for the Board to oppose Senate Bill 768 and encourage its partners, including the Chesterfield County School Board, Virginia Association of Counties and the Coalition of High Growth Communities, as well as other counties throughout the state, to oppose the passage of the draft. legislation before the General Assembly. Mr. Gecker stated it is not just the draft that .,the Board should .oppose.. He expressed concerns that, if minor changes were to be made to the legislation, the Board might have to come back and address those changes. He stated, with a systemic change such as this, it would be appropriate to pass the legislation on to a study commission and determine whether an alternative that works could be reached for next year. He stated, given the last-minute introduction of this legislation, with no contact with the county, he would like the sense of the motion to oppose not only the passage in its current form, but any significant change in the current system this year and recommend that the General Assembly put it off to study for a year and work with localities to see if an acceptable system can be produced. Mr. Warren accepted Mr. Gecker's amendment. Mr. Holland seconded the amended motion. Ms. Durfee stated she understands why Mr. Gecker is requesting the amendment to the motion, indicating that the legislation needs to be looked at in its entirety. She further stated she supports sending a message to the legislative delegation that the county needs comprehensive, long-term solutions, not short fixes, to address transportation and adequate public facilities. She stated she would like to see the county's legislative delegation work very hard on the issues that provide for the citizens' health, public safety and welfare. Mr. Gecker requested that the County Administrator inform the county's legislative delegation specifically of the Board's action, and also inform them of the Board's disagreement with some of the underlying statistics that have been used by the sponsor of the bill in order to suggest to people that Chesterfield would benefit from this legislation. He further requested that the county's statistics relative to revenue shortfall under the proposed bill be included in the correspondence to the legislative delegation. Mr. Warren stated he had hoped the Board would adopt a resolution relative to the Board's opposition to the proposed legislation, but thinks the county's position has been stated well in the comments and motion. Mr. Warren then called for a vote on his motion, seconded by Mr. Holland for the Board to oppose Senate Bill 768 and encourage its partners, including the Chesterfield County School Board, Virginia Association of Counties and the Coalition of High Growth Communities, as well as other counties throughout the state, to oppose the passage of the draft legislation before the General Assembly. • i• 08-86 02/01/08 And, further, the Board directed the County Administrator to inform the county's legislative delegation in writing specifically of the Board's action, the Board's disagreement with some of the underlying statistics that have been used by the sponsor of the bill in order to suggest to people that Chesterfield would benefit from this legislation, and to include the county's statistics relative to revenue shortfall under the proposed bill in the correspondence to the legislative delegation. U • • Ayes: Warren, Gecker, Jaeckle, Holland and Durfee. Nays: None. Mr. Warren called forward Ms. Curtin to summarize the legislative proposals relative to the regional authority board. Ms. Curtin stated Senate Bill 767 uses the existing RMA as the vehicle to create a regional transportation authority. She further stated House Bill 1573 is modeled on the transportation authorities created last year for Hampton Roads and the existing one in Northern Virginia. In response to Mr. Gecker's question, Ms. Curtin stated House Bill 1573 has not been withdrawn. Discussion ensued relative to the each of the bills' funding sources for the authority. In response to Mr. Holland's question, Ms. Curtin stated the bills will have to be heard in committee prior to crossover on February 12th, or they will die. Mr. Holland expressed concerns relative to the General Assembly's lack of process in solving transportation issues long-term versus short-term fixes. There was brief discussion transportation authorities in and Hampton Roads. relative to the regional existence in Northern Virginia Mr. Warren stated approval of a regional transportation authority would result in a different opportunity for local governments to impose taxes for the purpose of meeting transportation needs. He inquired why the General Assembly is not addressing transportation needs instead of creating a regional authority for local governments. to address the needs, indicating that the county has $1 billion in transportation needs. Ms. Durfee stated choosing three out of the seven funding sources included in the regional transportation authority legislation would pose a problem for Chesterfield. She further stated, in her opinion, this legislation mirrors the impact fee legislation in that it is not yet ready to go forward. She stated it would be advantageous for the legislative delegation to meet with the Board to work out the details of legislation that would significantly impact the county. Ms. Curtin stated the county always encourages early discussion with the legislative delegation. 08-87 02/01/08 Mr. Holland expressed concerns that there also appears to be a lack of flexibility with both of the legislative proposals relative to regional transportation authorities, indicating the local governments should have flexibility when making decisions. Mr. Warren thanked the Board members for attending the meeting on such a short notice. He suggested that the Board partner with the legislative delegation prior to next year's General Assembly in an effort to understand their intentions and make the public aware. 2. ADJOURNMENT On motion of Mr. Gecker, seconded by Ms. Durfee, the Board adjourned at 4:37 p.m. until February 13, 2008 at 3:00 p.m. Ayes: Warren, Gecker, Jaeckle, Holland and Durfee. Nays: None. C7 u C7 i~%i~ ~~ a J mes J. Stegm ier Arthur S. Warren ounty Administrator Chairman 08-88 02/01/08